Martha Stewart, displayed earlier this year and, in inset, leaving federal Court in 2005, is under scrutiny over marketing 3,000 shares of Sequential Brands group stock just days prior to reports of the firm"s impending bankruptcy. NY post photo composite
Martha Stewart’s stock trading is elevating eyebrows — again.

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The 79-year-old domestic diva — that famously served five months in prison in 2004 and 2005 because that lying come the feds about her revenue of ImClone shares — sold much more than $67,000 precious of stock in Sequential Brands team in a pair of transactions last month, securities filings show.

The June 4 and also June 7 sales — which had actually Stewart discharge 3,000 and 3,266 share at price of $10.74 and $10.82, dong — to be completed simply two days before Bloomberg reported that the struggling license firm to be preparing for a feasible bankruptcy filing.

Shares the Sequential — i m sorry reportedly has been preparing to record for thing 11 as it negotiates a transaction to market the Jessica Simpson clothes brand ago to the 40-year-old popular music singer — tanked 11 percent on the Bloomberg report. They have steadily deteriorated since. ~ above Thursday, castle closed at $8.30 — off 23 percent from whereby Stewart unloaded them at an typical price that $10.78.

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Martha Stewart sold shares of license firm Sequential quickly after leaving the board even as the company careens toward bankruptcy. Getty Images

There’s no indication the Stewart was mindful the Bloomberg report was coming, and troubles in ~ Sequential weren’t brand brand-new at the time. A month earlier on may 4, The article had report on the company’s woes amid its Jessica Simpson talks, noting the a address lender KKR to download a distressed-debt expert on its board looked prefer a possible move come prepare because that bankruptcy.

On Thursday, a lawyer for Stewart provided that she had left Sequential’s board in so late March, as disclosed in a securities filing, and that the firm in April and May made announcements about its year-end results, an elderly officers’ resignations and also changes come its credit agreement, amongst other matters.

“Martha had actually no advancement knowledge of any type of of these decisions,” the lawyer stated in a statement. “In early on June, after every one of this disclosure and much more than 2 months after ~ she resigned, she make two an extremely smallstock trades allpublicly discover as compelled by SEC rules.”

Martha Stewart offered shares in Sequential ~ above June 4 and June 7. She to be a manager of the company, i beg your pardon Bloomberg reported was headed to bankruptcy on June 9. NY write-up photo composite

The attorney added that Stewart “had no product nonpublic information, her transactions were totally compliant through applicable rules and also any speculation come the contradictory is just meritless innuendo.”

Nevertheless, sources close come the company say it’s not a great look, as Stewart had actually been top top the company’s board and also privy come its gaue won turmoil during the critical months due to the fact that December, when the agency got a complaint from the Securities and Exchange Commission over its accounting practices.

“There have been discussions because last year, going right into this year around potential bankruptcy and also doing a sale v a bankruptcy,” consisting of at the board level, a resource close come the agency told The Post.

Stewart hasn’t offered any an ext stock and also remains Sequential’s second-biggest investor with an ext than 200,000 shares.

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Jessica Simpson is trying come buy she brand earlier from Sequential Brands together it careens towards bankruptcy. Instagram

“Although she initially may have believed her trading was proper, she may have actually stopped trading because someone recommend her the the trades might be problematic,” Michael Bachner, a securities lawyer with regulation firm Bachner & Weiner, told The Post.

Stewart had actually stepped down together with three various other directors as component of a address lenders come shuffle the board in exchange for a waiver top top its punishing trove of debt. Yet she is the only ex-director known to have sold shares. Previous directors Al Gosset, john Dionne and Gary Johnson didn’t respond to requests for comment.

A spokesperson because that Sequential decreased to comment.

Former executive, management chairman wilhelm Sweedler, meanwhile, stays the biggest shareholder and has maintained his 13-percent stake intact, according to filings. Ex-director Stewart Leonard Jr., owner of the eponymous brand-new York-area grocery chain, called The short article he has actually held on to his stake, too.

“I’m no a wall Street man or a public share guru,” Leonard said The short article in decreasing to talk about Stewart’s trading, around which he stated he to know nothing. “At this point, I’m no selling. I’ll hang on and see what happens.”

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Martha Stewart arriving at Manhattan federal court in brand-new York top top January 20, 2004. Bloomberg News

If Stewart had actually learned that Sequential was preparing because that bankruptcy by virtue of she director’s seat, “it would be wrong for her to trade on that information even if that information is the topic of windy speculation,” claimed Bachner, the securities lawyer. “Knowing something together a truth is more significant to an investor than merely speculating that the event will take place — no matter just how intelligent the speculation can be.”

But other experts say the case is no so clear-cut, despite Stewart’s current director status.

“When she offered the stock, she either had actually material, nonpublic information or she go not,” securities attorney Pablo Quinones said The Post. “If the material details was a pending bankruptcy and also that info was public when she traded, then it would certainly not matter that she previously learned of the info while she to be a director.”

Stewart join Sequential’s board in 2015 once the for sure bought she company, Martha Stewart life Omnimedia because that $353 million. 4 years later in 2019, Sequential offered the brand to another licensing firm for $140 million much less than what that paid for the company.

At the time, sources told The short article that Stewart’s pay and also perks, consisting of $1.8 million in basic pay add to a $100,000 cost account, first-class travel, hotel accommodations and hair and also makeup solutions was too rich provided the brand’s performance.

In 2004, Stewart began serving five months in prison and five month of home arrest together with two years of probation for obstruction of justice and for lie to commonwealth investigators about why she marketed her 3,928 ImClone shares, which saved her only $45,673 in losses.

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ImClone’s share plummeted 16 percent two days after her profession on news that the Food and Drug management did not approve its cancer drug. The company’s chef executive, Sam Waksal, alerted family members around the bad news and they consequently sold end $10 million that ImClone stock prior to the FDA news came out.